Mr Hain said: "I have returned to the Cabinet to help ensure that we recover from a dreadful period for Labour and for parliamentary democracy."

Mrs Kinnock, 64, became an MEP in 1994, before announcing her decision to step down ahead of Thursday's elections.

Her husband Neil Kinnock, the former Labour leader, joined the House of Lords in 2005 after serving as a European commissioner.

GLENYS KINNOCK FACTFILE

Standing down as MEP after this election having served in Strasbourg and Brussels for 15 years

Born in Northamptionshire in July 1944, she was educated at Holyhead High School, Anglesey and graduated in 1965 from University College, Cardiff in education and history

Wife of ex-Labour leader Lord Kinnock, who she met at Cardiff University. The couple have two children

Labour spokersperson on international development and has taken a close interest in issues like fair-trade and maternal mortality

She was a teacher in nursery, primary and secondary schools for nearly 30 years before entering the European Parliament

Mrs Kinnock said she was "honoured" to be joining Gordon Brown's Labour government.

"I look forward to using my 15 years of experience in the European Union working on vital issues which affect our people and our neighbours."

She added: "I am particularly pleased to be part of an invigorated government with the leadership, vision and determination to deal with the critical challenges faced by our country and to help families and communities to overcome this global recession."

Meanwhile, Ms Flint who is understood to have quit after Mr Brown failed to promote her to a full cabinet job, accused the PM of treating her "like female window dressing" and alleged there was a "two tier cabinet - the inner circle and the rest of cabinet".

He resigned in January 2008 to clear his name over the declaration of £103,000 of donations in his bid to become deputy Labour leader.

He said that after recent events the party had to "rebuild trust".

Mr Hain, 59, who had previously been Welsh secretary from 2002 to 2008, succeeds Paul Murphy at the Wales Office.

Speaking from his Neath constituency, Mr Hain added: "For a Welsh MP, it is a real privilege to be secretary of state for Wales again and I pay tribute to Paul Murphy who has been a close and valued friend for nearly 20 years and an outstanding servant of the Labour Party."

"I have returned to the cabinet to help ensure that we recover from a dreadful period for Labour and for parliamentary democracy.

"We must rebuild trust and explain to the British people the serious dangers of the Tories' old right-wing policies, especially their plans for savage public spending cuts."

I have been very proud to have served in Gordon Brown's cabinet for the past 17 months, and I fully support his remaining as our Prime Minister

Outgoing Welsh Secretary Paul Murphy

Mr Hain, who had also previously been work and pensions secretary, was found to be guilty of "serious and substantial" failures in not registering donations, the Commons standards watchdog found.

He apologised and said his mistakes had been honest.

Late on Thursday, Mr Hain's successor at the department of work and pensions, James Purnell left the cabinet, and urged Gordon Brown to stand aside.

Shadow Welsh Secretary Cheryl Gillan said Mr Hain's appointment was "another sign of Labour looking to the past when what we need is a fresh start."

"Instead of looking forwards they are turning to the past," she said.

"Peter Hain has hardly been a cheerleader for the Brown government, yet is more than willing to take a job off him."

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Peter Hain describes Gordon Brown as a "towering figure" in British politics as he returns as Secretary of State for Wales

Welsh Liberal Democrat leader Kirsty Williams added: "Gordon Brown is desperate to find anybody who will sit quietly within his last-chance saloon cabinet and is unable to find Labour MPs who have the fresh perspective and clean record to signal a genuine change of direction towards a better politics."

Plaid Cymru's leader in Westminster Elfyn Llwyd said Mr Hain was a "familiar face" in Welsh politics and had played an important role in constitutional development.

"But today's frantic Cabinet reshuffle is not going to solve the crisis currently engulfing Westminster," said Mr Llwyd.

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